Credit Score Basics
What can you check annually for free?
Credit score
True or False?
it is better to open a line of credit when you are young
True
What is a credit limit?
The most amount of credit you can spend on that card
What is the best way to start building credit?
Consistently pay bills on time
What is interest?
The cost of borrowing money
What is the most important factor in calculating credit score?
Payment history
What hurts your credit score the most?
Late payments
What is at least one of the places where you can check your credit score? (3 possible answers)
Equifax, Experian, and TransUnion.
What happens when you pay your bills late?
Bad credit score
Does a higher credit score result in higher or lower interest rates?
Lower
What is something you can do to raise your credit score?
Pay Bills on time
At what age can someone legally open their first credit card?
18
True or False: A lower credit utilization rate is better for your credit score.
True
What is the recommended percentage of credit to spend on a credit card?
30% or less
What is something to compare between different loans to find the best deal?
Interest rates
What is the highest credit score a person can have?
850
What type of credit card is designed for people with little to no credit history?
Secured credit card
If you increase your credit limit but do not increase your spending, what happens to your credit utilization rate?
It decreases
True or False: Closing an old credit card will always improve your credit score.
False
What is the type of loan that requires collateral, like a car or house?
Secured loan
Name one of the three major credit bureaus.
Experian, TransUnion, or Equifax
Name two ways to build credit responsibly.
Pay bills on time and keep credit utilization low
Paying off your credit card before what date can help keep your credit utilization low?
Statement closing date
How many years does a late payment stay on your credit report?
7 years
What type of loan has the highest interest rates: mortgage, student loan, or payday loan?
Payday loan